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Sempra rapped for meeting 6,000 miles from home
The Times 6 April 2005
SEMPRA ENERGY, an American utilities company worth $9.46 billion (£5
billion), came under fire from small investors and shareholder support
groups yesterday as it held its annual meeting in London, 6,000 miles away
from its San Diego headquarters.
Shareholder groups accused Sempra, owner of two big utilities in Southern
California — San Diego Gas & Electric Co and Southern California Gas Co —
of moving its meeting to avoid awkward questions.
Stephen Baum, chairman and chief executive, who attended his last annual
meeting before he retires, said there was no need for a meeting via an
internet or video link because Sempra had recently held an investor
conference in the US.
Mr Baum said he and another ten Sempra directors had decided to hold the
meeting in London to “raise awareness among European investors” and to tie
in with a visit to facilities in Spain.
At the Mandarin Oriental Hyde Park, The Times found just three independent
shareholder representatives present.
Neil Millar-Robinson, of Manifest, the UK-based proxy voting agency, which
represented two private shareholders at the meeting, said: “I can see that
US-based shareholders would feel disenfranchised. You can see from the
turnout the idea of reaching out to UK shareholders hasn’t worked.”
One of the three independent shareholder representatives was Monica Chong,
an American living in London, who attended on behalf of her grandparents.
She said she was surprised the meeting had been held in London, but her
grandparents were active with their shareholdings. The usual turnout at
Sempra’s annual meeting is about 200.
Two UK institutions that are big Sempra shareholders, UBS and Barclays,
did not attend, but Sempra said that it planned separate meetings this
week.
Greg Kinczewski, of Marco Consulting Group, who came from Chicago to
represent two union pension funds, described Sempra’s decision to hold the
meeting in London as “strange” and criticised it as unresponsive to
investors’ concerns.
Motions urging the annual election of directors, investor approval of
poison pill anti-takeover measures and expensing of stock options were
carried by shareholder votes against directors’ wishes. They have only
advisory effect. Motions on elections and poison pills have been carried
before
Patience Wheatcroft, Business Comment
Déjà vu
STEPHEN BAUM, chairman of Sempra Energy, hoped to raise the profile of
the California utility in Europe by holding its annual shareholders
meeting at a five star Knightsbridge hotel yesterday. Few independent
shareholders made it, the most vocal having made the trip from the United
States.
Sempra had been largely anonymous in London, despite buying the late
Enron’s metals trading interests. Mr Baum may now have lifted its profile
here but not in a manner likely to attract investors to Sempra’s
management style. At each of the past three well-attended meetings back
home, shareholders have voted through three entirely reasonable corporate
governance resolutions: executive options should be expensed; directors
should be elected annually, instead of en bloc every three years, and
poison pills should have to be endorsed by shareholders.
The same resolutions were passed yesterday but Mr Baum’s board regards
them as purely advisory and does not implement them. Unkind questions were
avoided but Sempra made such a bad impression that its rising profits and
dividends will go unremarked.
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